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Irham Iskandar
Development Planning Agency (Bappeda), Daerah Istimewa Aceh, Indonesia
Economics, Econometrics & Finance

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Flypaper effect at the local governments: an empirical analysis for Aceh Province Irham Iskandar
Economic Journal of Emerging Markets Volume 7 Issue 1, 2015
Publisher : Universitas Islam Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.20885/ejem.vol7.iss1.art3

Abstract

The objective of this reseach is to test the phenomenon of flypaper effect in local governments in Aceh Province during 2008 to 2012. The research used panel data analysis. Technically, it regresses the independent variables of the local owned revenue and unconditional grants on dependent variable of public spending where the institutions as a moderating variable. The flypaper effect was found in the case of public and infrastructure expenditures. The study also found that the institution is capable to reduce the use of unconditional grants. It means that by the role of institution the local owned revenue can be optimized.
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